Budget '06 may up plan spend by 18%

NEW DELHI: The budgetary support for plan expenditure for ’05-06 is expected to be finalised at about Rs 1,72,000 crore, including Rs 40,000 crore for the priority programmes identified by the National Common Minimum Programme.

The allocation is about 18% more than the Rs 1,45,600 crore provided for the current year, but about 12% lower than the Rs 1,95,000-crore support sought by the Planning Commission to ensure a GDP growth of 7-8%.

The allocation for about seven programmes of the NCMP — such as elementary education, primary health, rural employment which currently gets Rs 25,000 crore — is to be stepped up to Rs 40,000 crore.

The National Advisory Committee chaired by Sonia Gandhi had written to the Prime Minister seeking a hike in the allocation for these programmes. Allocation for Sarva Shiksha Abhiyan, mid-day meal and agriculture — including irrigation and watershed development — could see significant enhancement.

However, proposed programmes such as the national urban renewal mission could get less allocation than initially estimated. The national urban renewal mission, one of the likely announcements in the Budget, may get about Rs 6,000 crore as against the projected Rs 10,000 crore.

Allocations for Railways could be much lower than what demanded by the ministry. Centre’s funding for the infrastructure sector may not be entirely reflected in the Budget as some of it will be carried out through special purpose vehicles.

The budgetary support for states is expected to be less than 40%, given that the Centre has decided to allow them to finance part of their plan expenditure with market borrowings as recommended by the Twelfth Finance Commission (TFC).

Budgetary support to states flow in the form of loans and grants. Special category states get 90% of the central assistance in form of grants, while other states get only 30% of the assistance in grants.

The TFC had recommended that states should be allowed to borrow directly from the market instead of depending on the Centre to borrow.